Dear Members,

The Directors have pleasure in presenting the Fifty - Eighth Annual Report together with the audited accounts for the year ended March 31, 2018.

FINANCIAL RESULTS: (Rs. in Lakhs)

The Company has adopted “Ind AS” with effect from 1st April 2017. Financial statements for the year ended 31st March, 2017 have been re-stated to conform to Ind AS. Note 3 to the financial statement provides additional information on the transition to Ind AS.

DIVIDEND:

The Directors are pleased to recommend a dividend of Rs. 2.50 per equity share of Rs. 10/- each for the year ended 31st March, 2018. The dividend payout will aggregate to Rs. 186.28 lakhs and the tax on distributable profits payable by the Company would amount to Rs. 38.30 lakhs.

Financial Performance:

The net revenue from operations for the Company stood at Rs. 14,911 lakhs. An increase of approximate 18% from the previous year. The PBT of the company has reduced due to the effect of change in method of valuing investments as per Ind AS, higher depreciation for Dahej plant which started its first phase of operations in January 2018 and reduction in dividend received.

Sector wise Performance:

Speciality chemicals add value to any finished product and therefore are higher in value, lower in volume and require strong knowledge of the product and its applications. Dai-ichi is majorly focused on the following end use applications: -

Paints, Textiles, Oil Field, Agro, Construction and other areas that require the use of emulsifiers and surfactants.

The company’s focus on excellence in performance in these areas, allows for differentiation based on quality and effectiveness. The increased use of specialty surfactants and bio surfactants has allowed the company to use its application knowledge to develop greater and more effective products. Customized offerings that provide differentiation to the finished products of our customers is the company’s main focus.

The net sales revenues of the company grew by approx. 18% over last year with the strongest growth in the Oil field sector, as well as in chemicals for the Construction industry. The year started slowly gaining momentum into the fourth quarter.

Some order deferrals in the oil field chemical sector in the second quarter were compensated by a huge surge in demand in quarter III and IV for export of these products.

With a strong product portfolio in the domestic market in end use applications of Rayon, Construction and Agro and with new product launches in the last quarter of the year, the new financial year will see strong focus in these markets.

We plan to grow the emulsifier business for Agro Chemicals by 40% in the coming year.

In addition, we will see substantial organic growth in the Construction Chemical area.

In the Oil field sector, we continue to work with our partners, Nalco Champion to develop cost competitive products for their operations worldwide. We anticipate that over the next 2-3 years we will consolidate this business & become their preferred supplier.

Exports to the refinery sector saw a very major increase, boosting the revenues and bottom line of the company.

The Paint and Construction sectors have seen a growth of 20% over the previous year and could see similar momentum in the new year if some newer innovative products are commercialised as planned.

DAHEJ Plant:

The beginning of the calendar year saw the start-up of Phase I of our Dahej Plant. Since then the plant has been regularly exporting our oil field products to the Asia Pacific Markets. In the past 3 months it has been our endeavour to stabilize and ramp up operations.

Phase II is in the process of pre-commissioning and commercializing activities. Our Ethoxylation facility is currently going through technical trials with our Swiss technology partner, Buss Chemtech AG.

Dahej when fully functional will double the capacities of our Pune plant, manufacturing diverse products to world class standards for the specialized needs of our customers. The vision & aspiration for building the Dahej plant was to set up a world class facility focused on safety and the environment. This Facility capitalizes on the available technology and expertise of the Company built over 50 years, to develop customized need-based offerings to the market. In addition, the new Buss Technology will allow the company to differentiate its Ethoxylates, whilst manufacturing with minimum by-products and improved yields. Products manufactured are close to zero dioxane content after the post treatment.

The plant is equipped with a state-of-the-art Swiss Technology- ‘Buss Loop Reactor’ - the 1st of its kind in India. The gas dispersion in a liquid, without any moving parts inside the reactor, makes this the safest technology for an ethoxylation process.

The 300 KLD effluent treatment plant has primary, secondary and tertiary treatment units. The treatment plant has the State of Art ‘Membrane Bio Reactor’ technology (Huber Membranes) for separation. The treated water will be complexly recycled within the premises and has a Zero Liquid discharge unit.

The Dahej site facilitates the manufacture of our current product portfolio with significantly higher capacities whilst strengthening our range in newer markets like Agro & Personal care.

Working Capital Management:

The significant ratios of the Company such as Ratio of Inventory to Sales is 12.95%, Receivable to Sales is 20.03% and Net Working Capital to Sales is 18.94%.

The working capital was rotated 4 times in the year, showing effective working capital management.

The Company has made arrangement of loan facilities from Banks for Rs. 92 Crores for its Dahej project, of which Rs. 65 Crores are utlised till 31st March, 2018 for payments related to Dahej.

JOINT VENTURE / ASSOCIATE/ SUBSIDIARY COMPANIES:

The Company has a Joint venture with CTI Chemicals Asia Pacific Pte. Ltd., an Ecolab Company in Nalco Champion Dai - ichi India Private Ltd., in the ratio of 50:50.

As on March 31, 2018, the Company has one subsidiary, Dai-ichi Gosei Chemicals (India) Limited. The Company continues to be a dormant company.

The Annual accounts of the subsidiary company are placed on the website of the Company and will be provided to the members on request.

As per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Companies Act, 2013 and applicable Accounting Standards, the Consolidated Financial Statements of the Company with its Joint Venture Company, Nalco Champion Dai - ichi India Pvt. Ltd and Subsidiary Company, Dai-ichi Gosei Chemicals (India) Limited., duly audited by the Statutory Auditors are attached to the financials.

Statement containing salient features of the financial statement of subsidiary/ associate company/ joint venture are attached to the financials.

DIRECTORS:

Mr. A. H. Jehangir retires from the Board of Directors by rotation, in pursuance of the provisions of the Companies Act, 2013 and Articles of Association of the Company. Being eligible for reappointment, he has offered himself for re - appointment. The Board of Directors recommends his re-appointment.

The information required to be furnished under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 & Secretarial Standards is given in the Notice of the 58th Annual General Meeting.

The Members of the Company had appointed Dr. Anil Naik, Mr. Kavas Patel and Mr. Keki Elavia as Independent Directors under the Companies Act, 2013 for a period of 5 years for a term upto 31st March, 2019. All Independent Directors have given declarations that they continue to meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

DIRECTORS’ RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(5) of the Companies Act, 2013:

a) In the preparation of the annual accounts, for the financial year ended March 31, 2018, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year March 31, 2018 and of the profit and loss of the company for that period;

c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The annual accounts have been prepared on a ‘going concern’ basis;

e) Proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and operating effectively;

f) Proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems are adequate and operating effectively.

DETAILS OF INTERNAL FINANCIAL CONTROLS:

The Board of Director have laid down Internal Financial Controls within the meaning of the explanation to Section 134(5)(e) (“IFC”) of the Companies Act, 2013. The Board believes the Company has sound IFC commensurate with the nature and size of its business. Business is however dynamic. The Board is seized of the fact that IFC are not static and are in fact a fluid set of tools which evolve over time as the business, technology and fraud environment changes in response to competition, industry practices, legislation, regulation and current economic conditions. There will therefore be gaps in the IFC as Business evolves. The Company has a process in place to continuously identify such gaps and implement newer and or improved controls wherever the effect of such gaps would have a material effect on the Company’s operations.

BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, individual directors and its committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

NUMBER OF MEETINGS OF THE BOARD AND COMMITTEES OF THE BOARD:

Details regarding Board / Committees, its composition, number of meetings held, terms of reference, policies adopted are provided under the Corporate Governance Report forming part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES:

During the year under review, the Company has undertaken CSR activities through different Implementing Agencies in the areas of Health Care including Palliative Health Care and Childhood Cancer Treatment, Education, Sanitation and Conservation of Environment.

Aid is provided to needy patients suffering from chronic diseases such as Renal failure, Cancer, Heart diseases, Lung diseases etc. Scholarships / Fees sponsorships are provided to the needy and deserving students.

Detailed report on CSR is annexed to the report as ‘Annexure A’.

MATERIAL DEVELOPMENTS ON HUMAN RESOURCES INCLUDING NUMBER OF PEOPLE EMPLOYED:

Human Resource plays an instrumental role in securing the future success of Organization. Human Resource Development is guided by long-term vision of creating an environment where employees can thrive for and are enabled to deliver sustainable organizational performance.

We retain, develop and continue to attract people with the requisite skills to help shape a better organization and foster employees’ engagement and motivation throughout the implementation process.

The Company pursues multiple developmental initiatives and ongoing training programs to reinforce a high-performance work ethic. Performance-based recognition drives company’s culture of achievement and excellence.

The Company’s Human Resource Policy over the years has resulted in a very low attrition ratio. All manpower requirements are assessed and filled in a timely manner. The Company has a sound knowledge pool of experienced employees, which helps it to maintain consistency in performance across all disciplines. It has built a team of dedicated employees, who work with commitment and a sense of belonging towards the growth of the Company.

Following areas are given special attention to enhance performance of the employees;

- Succession plan based training programs to fill the Knowledge gap.

- Dai-ichi Employee Engagement Program (DEEP).

- Career growth plan through annual assessment.

- Supporting employment related legislative compliance.

- Promoting excellence in human resource management.

- Internal External Training Program.

- The promotion of an atmosphere of mutual respect, fairness and concern.

- Company has extended its facility for Apprentice Scheme, to needy and economical weak youths for pursuing special industrial training.

As on 31st March 2018, the total number of employees on the payrolls of the company at all the locations was 220.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

The information required pursuant to Section 197(12) read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees’ particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

AUDITORS:

STATUTORY AUDITORS:

M/s. B S R & Co. LLP were appointed as the Statutory Auditors of the Company to hold office from the conclusion of 57th Annual General Meeting upto the conclusion of 62nd Annual General Meeting of the Company. The Auditors Report for the year under review does not contain any qualifications, reservations or adverse remarks.

INTERNAL AUDITORS:

M/s. B.K. Khare & Co., Chartered Accountants, are the Internal Auditors of the Company. The Management regularly reviews the findings of the Internal Auditors and effective steps to implement any suggestions/observations of the Internal Auditors are taken and monitored regularly. In addition, the Audit Committee of the Board regularly addresses significant issues raised by the Internal Auditors.

SECRETARIAL AUDITORS:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Kaushik M. Jhaveri & Co., a firm of Practicing Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the F.Y 2017-18 is annexed herewith as ‘Annexure B’.

COST AUDITORS:

As per Section 148 of the Act read with the Companies (Cost Records and Audits) Rules, 2014, the Board of Directors approved the appointment of Mr. S.G. Jog, Cost Accountant, (Membership no. 5599), Pune as the Cost Auditor to conduct audit of the cost records of the Company for the financial year ending March 31, 2018 & March 31, 2019.

The remuneration payable to the Cost Auditor has to be ratified by the Members of the Company. Accordingly, the matter relating to ratification of the remuneration payable to the Cost Auditor for the financial year ending March 31, 2018 & March 31, 2019 is being placed at the 58th AGM.

DETAILS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

The Company has not provided any loan or given any guarantee / security to any person.

Details of investment made by the Company are provided in the financial statements, under Investment Schedule.

PARTICULARS OF CONTRACTS AND ARRANGEMENT COVERED UNDER SECTION 188 OF THE COMPANIES ACT, 2013:

All Related Party Transactions that were entered into during the financial year were on an arm’s length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act and the Listing Regulations. There were no materially significant Related Party Transactions made by the Company during the year that would require Shareholder approval under the Listing Regulations.

The Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.

Details of Related Party Transaction Policy are provided in Corporate Governance Report.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of Annual Return in Form MGT 9 is annexed herewith as ‘Annexure C’.

CORPORATE GOVERNANCE:

As per Regulation 15 of SEBI Listing Regulations, applicability with respect to provisions of Corporate Governance is not mandatory to the Company. The Company has been complying with the provisions on voluntary basis.

A separate report on Corporate Governance is attached as a part of the Annual Report along with the certificate from Practicing Company Secretary on its compliance.

LISTING:

The Equity Shares of your company are presently listed on BSE Ltd. and the Company has paid the annual listing fees for the financial year 2018-2019.

HEALTH, SAFETY & ENVIRONMENT:

Health, Safety & Protection of the Environment are the priority areas for the Company. The Company continues to put special emphasis in this area at every stage, from conception and design of new products, optimization of process, to commercial manufacturing and delivery of goods to the customers. The Company has successfully completed DNV-GL Periodic Audit of ISO 14001:2015 & OHSAS 18001:2007 and Certification Audit of ISO 9001:2008.

(a) Health:

A special committee ensures good sanitation and hygienic condition in the plant and canteen. Medical examination of all the employees is carried out annually. Six monthly medical examinations are conducted for the employees who are working in Hazardous Areas. Health awareness trainings and programs are being conducted regularly.

(b) Safety:

Internal and External Safety Audit, regular inspections pertaining to risks and hazards for Ethoxylation/ Propoxylation process are carried out as per the provisions of Factories Act. PLC system has been installed for Ethoxylation/ Propoxylation process to ensure enhanced safety features and automation to nullify human errors. HAZOP Study and Hazard Identifications and Risk Analysis studies have been carried out for all processes.

Every year Safety week is celebrated from 4th March to 11th March during which competitions, lectures and training sessions are organized to inculcate and enforce the need for a safe working environment and Emergency Planning.

(c) Environment:

Regular environment monitoring carried out to ensure pollution levels for air and water are below the specified limits by the State Pollution Control Board. Strict adherence to environment rules is ensured by conducting inspections and environment audit. Environment programs and trainings conducted to inculcate a sense of conservation of environment.

Effluent Treatment Plant is upgraded and maintained and treated effluent is used in various processes, thus, increasing water conservation.

Sulphonation plant is also upgraded which has brought emission levels of Sulphur Trioxide (SO₃) & Sulphur Dioxide (SO₂) to a bare minimum.

INDUSTRIAL RELATIONS:

The wage agreement with the workers of the Company expired on 30th November 2008. As Conciliation proceedings before the Labour Commissioner, Pune for arriving at a settlement were not conclusive, the matter was referred to the Industrial Court, Pune for adjudication. The said reference was rejected by the Hon’ble Industrial Court for want of prosecution by the recognized union. The decision of the Industrial Court was challenged before the Mumbai High Court, the Court has upheld the decision of the Industrial Court. The matter was further challenged before the Hon’ble Supreme Court, the Supreme Court has remitted the matter back to the Mumbai High Court for certain issues.

Considering the prolonged judicial process and financial hardships that workers face, the Company together with some of the workers has taken initiative to come to an amicable solution and have signed individual wage rise settlements.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 are annexed to this report as ‘Annexure D’.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

As per the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013, Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year 2017-18;

- Number of complaints received: Nil

- Number of complaints disposed off: Nil ACKNOWLEDGEMENT:

Your Directors wish to place on record their appreciation of the contribution made by the employees of the Company. The Directors wish to convey their appreciation to the Banks, dealers and other business associates and the shareholders for their continuous trust and support.

CAUTIONARY NOTE:

Certain statements in the Directors’ Report and Management & Discussion Analysis section may be forward looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of future performance and outlook.

For and on behalf of the Board

Mrs. S.F. Vakil

Chairperson & Managing Director

Place: Mumbai

Date: May 3, 2018